You just saw this new credit card offering irresistible and attractive perks, and you want to apply for it. Then you discover that the offer is only available for those with a “fair to excellent” credit score, and yours is below that requirement. Don’t give up yet. Check out Experian Boost. The service can give your low credit score an instant boost so you can qualify for that credit card you want.
Would it matter if you have a low credit score? Yes, it greatly matters because a high credit score means more financial opportunities for you. Credit scores can significantly impact your lifestyle. A high credit score is essential if you plan to buy a house, borrow money, apply for a credit card, or get a car loan. Having a high credit score means lenders will see you as a low-risk borrower and believe you can repay your debts on time.
A high credit score is an indication that you have a good history of paying your bills on time. You will also more likely receive a lower loan interest rate than someone with a lower credit score. On the other hand, low credit scores can be a limiting factor to financial opportunities. If you have a low credit score, it’s not the end of the world. You can improve low credit scores immediately through the Experian credit score boost. However, be prepared to see varying results. While some may see their credit scores improve, others may not.
Read on to see how Experian Boost service works to help you raise your low credit scores.
What is Experian Boost?
Experian launched the Boost service in 2019, designed to help consumers with low credit ratings improve and boost their credit scores for free.
When you connect your bank account, Experian Boost will identify your payment history for utilities and streaming services in your banking records. These credit histories don’t usually have any positive or negative effect on your credit ratings. Experian Boost picks out the payments you made on time and posts those payments in your current credit file.
Experian Boost cannot hurt credit scores because it will pick up only positive information. You can also exclude certain payments or opt-out of the service anytime. The service has proved its effectiveness shown by its increasing number of users.
There are over 40 credit bureaus in the United States, but the top three giants are Experian, Equifax, and TransUnion. Lenders go to these three agencies for payment information from individuals or businesses.
FICO scores are the most popular basis for credit scores. About 90 percent of America’s leading lenders use FICO Score as their basis for approving loans and credit applications. Experian Boost provides almost instant results, which means any increase or improvement in credit scores can immediately affect you. The boost will benefit you, especially if you apply for new credit, house mortgage, and other loan opportunities.
The Experian Boost credit score aims to help “thin-file” customers or those who don’t have a lot of credit accounts and those with less experience with credit to show signs of responsible financial behavior by picking out and highlighting the payments made on time in their credit report.
How the Experian Boost service works
Whenever you apply for credit, loan, or a mortgage, the giant credit reporting agencies will provide evaluations of how creditworthy you are to the banks and other lenders. The information will ‘make or break’ your opportunities because lenders will use this to make assessments before they decide to either approve or deny your loan or credit application.
Once you activate Experian Boost and give access to your bank account, the service will scan your transactions to spot qualified bills that are paid on time.
Qualified monthly bills are the following:
- Cable and satellite
- Landline and mobile phone plans
- Power and solar
- Video streaming services from HBO, Disney+, Netflix, and Hulu.
How does Experian Boost work? As soon as Experian Boost detects a history of payments made on time, you can see an instant increase in your FICO credit scores. This is after you have confirmed you want to add information for those payments to your credit report.
Take note that results may vary based on your account. It is possible that you may or may not see a credit score change at all. The service adds a history of positive payments to your credit rating files. As soon as you sign up and connect your bills, you’ll instantly receive your new Experian credit score boost, which may reflect an increase.
Experian Boost eligibility
The average user of this service can expect a rise of 13 points in their FICO credit scores. This boost could be enough for some consumers to tilt their credit score from poor to fair, fair to good or very good, and provide benefits and savings through new loan opportunities or low-interest rates.
Experian credit scores and ranges are as follows:
- 300–579: Poor credit
- 580–669: Fair credit
- 670–739: Good credit
- 740–799: Very good credit
- 800–850: Excellent credit
Utility companies do not usually report your regular payments to credit bureaus, so your payments—whether on time, late, or missed, are not included in credit reports and have no impact on credit scores.
Late or missed payments will be recorded on your existing credit history and always result in a lowered credit score. Experian Boost reviews only your on-time payments, which means it doesn’t matter if you haven’t always been on time or missed a few payments.
To be eligible for Experian boost, you must meet four conditions:
- You must have an existing credit file. If you have an active loan or at least one credit card, you’re good to go.
- You make regular bill payments using a checking or savings account.
- You have on-time payments and have paid your bills on time for at least three months.
- You make payments directly to utility providers.
However, remember that since Experian provides this service, it will only influence your Experian credit score and credit report. It won’t make any difference in credit scores with the other two credit bureaus – TransUnion or Equifax.
When you apply for credit, lending institutions review your credit reports from any of the three credit bureaus. However, even if you got a credit score boost from Experian, it does not affect or change your qualification to get approved for a loan or credit card if the lender uses Equifax or TransUnion.
Who needs Experian Boost the most?
Experian Boost service best suits consumers who belong to the following:
- Those who are new to credit.If you are new to credit history building or have a low credit score, you can use a boost to improve your rating. Sure, you can pay outstanding and new bills on time and keep your credit card balances low. However, building strong credit scores can take years, and improving a bad or low credit score takes time and effort.
- Consumers who have poor or fair credit scores. If you are late or miss a payment, your current credit scores will dip. Rebuilding your credit is not an easy endeavor. It will take years and diligence on your part to keep up you’re your bills. This is where you can use a big boost. According to Experian, consumers who get the best results from Experian Boost have very poor to fair credit scores.
- Those who are so close to the next credit tier. Being just some points away from the next tier is frustrating, especially if you want to apply for better credit card products or loans with better terms and lower interest rates. Experian Boost can help you make the significant jump to the next tier.
Pros and cons of Experian Boost
Although it has already helped and continues to help thousands of Americans show their creditworthiness, Experian Boost does not solve everybody’s low credit score problem. The service comes with some benefits and drawbacks, including the following:
- Experian Boost reports only the positive payment information from your bank transactions
- The service allows your utility bill payments to be counted toward your Experian credit score.
- You can see credit score boosts instantly.
- It helps build or repair credit scores.
- There is no credit inquiry.
- You have to give personal data for Experian to access your accounts.
- Experian Boost will offer the most benefits to thin-file consumers.
- No 100 percent guarantee using Experian Boost will increase your odds of approval for a specific loan or credit product from a particular lender.
- Other versions of FICO scoring models might not work with the Experian credit boost features.
- Experian Boost only includes payments for utility, telephone plans, and streaming programs. It will not involve other regular payments like house rent.
- Not every lender uses Experian credit files.
How to sign up for Experian Boost
Using Experian Boost to improve credit scores isn’t complicated. Here is what you can do:
- Sign up for a free Experian account. Fill in your personal information, select “Looking to try Experian Boost” from the options, and verify your identity.
- Connect Experian to your bank account, which you regularly use for paying your bills.
- Allow Experian to access your data.
- Review your credit report and score.
- Choose which payment data with positive history you want to include in your current credit file. Verify and confirm the information.
- Wait for Experian to boost your score.
The entire process usually takes less than 10 minutes, and you can see an improvement in your credit ratings immediately.
The Experian Boost could trace your on-time payment data for as far back two years, but the good news is late payments on the account you linked won’t show up through this feature. However, this does not mean you are free from paying your outstanding bills. Always pay on time to avoid penalty fees.
In addition to the ability to boost credit scores, Experian Boost can also update FICO scores and Experian credit reports every month. It also gives you free credit monitoring and sends you alerts if there are changes to your Experian credit report.
Experian Boost versus UltraFICO
You can compare Experian Boost to UltraFICO, another credit-model product tested by Experian. UltraFICO also aims to help thin-file consumers and those trying to rebuild their credit scores. As of May 2020, UltraFICO service is only available through a small group of lenders as part of its pilot program.
Consumers can sign up on FICO’s website and link their bank accounts, allowing UltraFICO to scan bank transactions. The service will check how much cash you have, how active and how long has your bank account been open, and whether there has been a negative balance.
Commonly Asked Questions
Is Experian Boost legitimate?
The first question you would most likely ask is, “Is the Experian Boost service legit?”. The answer is yes. Experian Boost is legitimate.
Is Experian Boost safe?
Is Experian Boost safe to use? The quick answer is yes. It is safe and will not harm your existing credit score. It will only pull information of on-time payments you made to qualified bills found in your bank transactions.
Some people are hesitant to grant access to their accounts. Be assured that Experian can access read-only data but won’t have access to your funds. After connecting Experian Boost to your account will only scan transactions for qualified monthly utility payments. You can always opt out of the Experian boost service and update payment history information yourself.
How does Experian credit boost work to raise credit scores?
Experian Boost service can influence your current credit score in a good way, especially if you have a low or fair credit score and want to level up your current rating. Experian Boost can raise FICO scores to 13 points. How is this possible? It’s like this.
If you pay your regular bills on time, Experian Boost will use that information to show positive financial behavior on your side.
Do we have to pay to use Experian Boost?
Experian Boost service is free and does not require a credit card with Experian CreditWorks Basic Plan. Registering for a free membership is easy and takes a few minutes to complete.
You have an option to upgrade to a paid premium plan. Features and benefits of a premium plan include a free Experian boost credit report every 30 days and a FICO score simulator. You will also get alerts when agencies receive credit inquiries or if new information is posted to your existing credit files. You will also get options that protect you from identity theft.
The Premium plan includes reports from all three major credit reporting agencies. Install the Experian Boost app on your iOS or Android device. The Creditworks premium is $24.99 per month with a free 7-day trial.
Does Experian Boost work?
The short answer is Yes. Although it is still a new service, more than four million Americans have since signed up, and the number is increasing. As of February 2021, Experian has helped over 3.9 million consumers grow their FICO scores by nearly 50 million points.
Based on Experian Boost’s review of user data, about 87 percent of users with a very poor rating and 63 percent of those with fair ratings experience an increase in their credit score.
How FICO score is determined
Several factors are used to determine FICO scores:
- History of payments- (35 percent). Lenders will check if you’ve paid past credit accounts on time and determine the risk amount if they extend credit.
- Amounts you owe- (30 percent) If you use a lot of your current available credit, banks may consider you at a higher risk of default.
- Length of your credit history- (15 percent)
- New Credit- (10 percent) If you don’t have a long credit history and you open several credit accounts within a short time, FICO would consider you a more significant risk.
- Credit mix- (10 percent) Although you are not required to have all, FICO also considers your credit card mix like installment loans, mortgage loans, and accounts from finance companies.
How Experian Boost impact FICO scores
Experian boost will track your payment and credit history length, making up 50 percent of your FICO credit score. This means Experian boost can improve credit scores instantly. But then again, paying your bills on time is just one factor influencing your current credit score.
Can I disconnect if I want to stop using Experian Boost?
Experian Boost service is not permanent. You can disconnect your bank accounts if you no longer want to use them. Disconnecting will delete your entire payment history from your report. The risk to this is credit scores could drop.
To sum up, the Experian Boost service is complimentary and optional that can help you boost your credit ratings. Remember that this service is not the fix-it-all solution to your low credit score. The service will benefit you to a certain extent depending on your personal credit history.
Don’t expect your credit ratings and scores to soar after using Experian Boost. You must do your part, like paying outstanding debts and bills on time to keep your credit ratings and score from dipping. Use your credit card responsibly, and don’t spend what you can’t afford to pay for because, at the end of the month, nothing can stop your bills from coming up.